Question 1

Deadweight loss from monopoly is

Accepted Answer

A)  the net decrease in the market surplus. 
B)  the producer surplus loss only. 
C)  the process of using public policy to reduce losses. 
D)  the decrease in productivity. 
A)  the net decrease in the market surplus. 
B)  the producer surplus loss only. 
C)  the process of using public policy to reduce losses. 
D)  the decrease in productivity. A

Question 2

-Refer to Figure 10.6.At the profit-maximizing level of output,total revenue is

Accepted Answer

A)  $10,000. 
B)  $20,000. 
C)  $40,000. 
D)  $50,000. 
A)  $10,000. 
B)  $20,000. 
C)  $40,000. 
D)  $50,000. C

Question 3

Which of the following is NOT an example of price discrimination?

Accepted Answer

A)  A restaurant offers senior citizens a discount. 
B)  A supermarket offers coupons to its customers. 
C)  An electric company charges different rates to its business and residential customers. 
D)  An electronics superstore charges a lower price than a small retailer for the same television set. 
A)  A restaurant offers senior citizens a discount. 
B)  A supermarket offers coupons to its customers. 
C)  An electric company charges different rates to its business and residential customers. 
D)  An electronics superstore charges a lower price than a small retailer for the same television set. D

Question 4

-Refer to Figure 10.6.At the profit-maximizing level of output,total cost is

Accepted Answer

A)  $10,000. 
B)  $20,000. 
C)  $30,000. 
D)  $50,000. 
A)  $10,000. 
B)  $20,000. 
C)  $30,000. 
D)  $50,000.

Question 5

Recall the Application about allegations that the makers of branded drugs made deals with generic drug makers once the patents expired on branded drugs to answer the following question(s).
-Recall the Application.Why would a company owning a drug patent that is about to expire pay a competitor $60 million to NOT produce a comparable drug?

Accepted Answer

A)  They claim their patented drug is a superior product. 
B)  They want to avoid losing profits. 
C)  They want consumers to have some alternatives. 
D)  No company would ever spend money in that manner. 
A)  They claim their patented drug is a superior product. 
B)  They want to avoid losing profits. 
C)  They want consumers to have some alternatives. 
D)  No company would ever spend money in that manner.

Question 6

Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit?

Accepted Answer

A)  Price equals marginal costs. 
B)  Marginal revenue is less than price. 
C)  Marginal revenue is equal to marginal cost. 
D)  all of the above 
A)  Price equals marginal costs. 
B)  Marginal revenue is less than price. 
C)  Marginal revenue is equal to marginal cost. 
D)  all of the above

Question 7

-Refer to Figure 10.8.If the paper books industry is competitive,the market price will be ________ and the market output will be ________ units.

Accepted Answer

A)  $25; 600 
B)  $10; 400 
C)  $20; 800 
D)  $15; 600 
A)  $25; 600 
B)  $10; 400 
C)  $20; 800 
D)  $15; 600

Question 8

Patent protection is always efficient from society's perspective.

Accepted Answer

A) True 
 B)False

Question 9

-Refer to Figure 10.3.If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price,the firm's profit will be

Accepted Answer

A)  $80. 
B)  $84. 
C)  $88. 
D)  $132. 
A)  $80. 
B)  $84. 
C)  $88. 
D)  $132.

Question 10

Which of the following is NOT an example of price discrimination?

Accepted Answer

A)  An individual finds his favorite brand of cookies on sale at the local grocery store. 
B)  A computer manufacturer offers a mail-in rebate for its product. 
C)  A local movie theater offers college students a discount on the price of admission. 
D)  An airline passenger who is staying on his trip over a Saturday night will pay a lower fare than a passenger traveling only during the workweek. 
A)  An individual finds his favorite brand of cookies on sale at the local grocery store. 
B)  A computer manufacturer offers a mail-in rebate for its product. 
C)  A local movie theater offers college students a discount on the price of admission. 
D)  An airline passenger who is staying on his trip over a Saturday night will pay a lower fare than a passenger traveling only during the workweek.

Question 11

Assume a non-price discriminating monopolist can sell 45 units of a good for $ 1.50 each and can sell 46 units of that good for $ 1.45 each.The marginal revenue of the 46th unit is

Accepted Answer

A)  $0.80. 
B)  $0.08. 
C)  -$0.08. 
D)  -$0.80. 
A)  $0.80. 
B)  $0.08. 
C)  -$0.08. 
D)  -$0.80.

Question 12

A product's patent lasts for ________ years.

Accepted Answer

A)  7 
B)  17 
C)  20 
D)  27 
A)  7 
B)  17 
C)  20 
D)  27

Question 13

If a restaurant charges seniors one price and nonseniors another price,the restaurant will apply the marginal principle

Accepted Answer

A)  twice, because the two groups have different demands. 
B)  once, because the two groups have the same demands. 
C)  only to the seniors because they consume the most. 
D)  by averaging the price charged to both groups. 
A)  twice, because the two groups have different demands. 
B)  once, because the two groups have the same demands. 
C)  only to the seniors because they consume the most. 
D)  by averaging the price charged to both groups.

Question 14

Barriers to entry are used to

Accepted Answer

A)  enable a firm to exercise control over the price of its product. 
B)  prevent other firms from entering the market. 
C)  allow the firm to earn economic profits. 
D)  all of the above 
A)  enable a firm to exercise control over the price of its product. 
B)  prevent other firms from entering the market. 
C)  allow the firm to earn economic profits. 
D)  all of the above

Question 15

Comment on the following statement: "For a nondiscriminating monopolist,marginal revenue is always equal to price."

Accepted Answer

The statement is false.Marginal revenue

Question 16

Price discrimination in practice is illegal.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following market changes would be expected to occur when a patent expires?

Accepted Answer

A)  an increase in the market price 
B)  an increase in generic products 
C)  a decrease in industry output 
D)  all of the above 
A)  an increase in the market price 
B)  an increase in generic products 
C)  a decrease in industry output 
D)  all of the above

Question 18

For effective price discrimination,the firm must ensure that the product is able to be resold.

Accepted Answer

A) True 
 B)False

Question 19

-Refer to Figure 10.5.The profit-maximizing level of profit for the Memory Company is

Accepted Answer

A)  -$1,800. 
B)  -$1,200. 
C)  -$800. 
D)  $0. 
A)  -$1,800. 
B)  -$1,200. 
C)  -$800. 
D)  $0.

Question 20

-Figure 10.7 shows the demand and cost conditions for a monopolist.How large is the deadweight loss due to monopoly?

Accepted Answer

The monopolist produces 10 few

Deadweight loss from monopoly is

-Refer to Figure 10.6.At the profit-maximizing level of output,total revenue is

Which of the following is NOT an example of price discrimination?

-Refer to Figure 10.6.At the profit-maximizing level of output,total cost is

Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit?

-Refer to Figure 10.8.If the paper books industry is competitive,the market price will be and the market output will be units.

Patent protection is always efficient from society's perspective.

-Refer to Figure 10.3.If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price,the firm's profit will be

Which of the following is NOT an example of price discrimination?

Assume a non-price discriminating monopolist can sell 45 units of a good for $ 1.50 each and can sell 46 units of that good for $ 1.45 each.The marginal revenue of the 46th unit is

A product's patent lasts for ________ years.

If a restaurant charges seniors one price and nonseniors another price,the restaurant will apply the marginal principle

Barriers to entry are used to

Comment on the following statement: "For a nondiscriminating monopolist,marginal revenue is always equal to price."

Price discrimination in practice is illegal.

Which of the following market changes would be expected to occur when a patent expires?

For effective price discrimination,the firm must ensure that the product is able to be resold.

-Refer to Figure 10.5.The profit-maximizing level of profit for the Memory Company is

-Figure 10.7 shows the demand and cost conditions for a monopolist.How large is the deadweight loss due to monopoly?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 10: Monopoly and Price Discrimination

Deadweight loss from monopoly is

-Refer to Figure 10.6.At the profit-maximizing level of output,total revenue is

Which of the following is NOT an example of price discrimination?

-Refer to Figure 10.6.At the profit-maximizing level of output,total cost is

Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit?

-Refer to Figure 10.8.If the paper books industry is competitive,the market price will be ________ and the market output will be ________ units.

Patent protection is always efficient from society's perspective.

-Refer to Figure 10.3.If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price,the firm's profit will be

Which of the following is NOT an example of price discrimination?

Assume a non-price discriminating monopolist can sell 45 units of a good for $ 1.50 each and can sell 46 units of that good for $ 1.45 each.The marginal revenue of the 46th unit is

A product's patent lasts for ________ years.

If a restaurant charges seniors one price and nonseniors another price,the restaurant will apply the marginal principle

Barriers to entry are used to

Comment on the following statement: "For a nondiscriminating monopolist,marginal revenue is always equal to price."

Price discrimination in practice is illegal.

Which of the following market changes would be expected to occur when a patent expires?

For effective price discrimination,the firm must ensure that the product is able to be resold.

-Refer to Figure 10.5.The profit-maximizing level of profit for the Memory Company is

-Figure 10.7 shows the demand and cost conditions for a monopolist.How large is the deadweight loss due to monopoly?

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand,supply,and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

-Refer to Figure 10.8.If the paper books industry is competitive,the market price will be and the market output will be units.